EXTRA: No ‘junk bond’ status for Ill. – does it bother anybody except Rauner?

It’s a bit of good news financially for the entity otherwise known as Illinois government. We're not junk!!!!!

RAUNER: Who else wanted Ill. to be 'junk?'

The Standard & Poors bond-rating agency on Wednesday let it be known that our state is no longer listed on their negative credit watch list. We’re not going to face the prospects of having our state credit rating reduced to junk.

THE BOND RATING agency that is one whose potential actions against Illinois for being so inept that we went through just over two full fiscal years without a full-fledged budget in place now says we’re “much closer to structural alignment” what with the way we managed to put together a budget for the state fiscal year that began July 1.

That budget, of course, includes the permanent increase in the state individual and corporate income tax rates that Gov. Bruce Rauner is determined to lambast from now through Election Day 2018 as a “32 percent tax hike.”

There were those who really believed the state would have been better off prolonging its financial ineptitude so as to avoid the increase – even though it can be shown the state needs the money in order to meet its financial obligations.

We were hearing the speculation that even with a budget in place, the state’s bond rating might still be dropped to junk status – which would mean the professional financiers were writing off the state’s future and saying our fundraising bonds would be virtually worthless.

A VERY BAD financial investment not worth making.

But with the Standard & Poors statement, it makes it clear that only the hardest-core of Republican ideologues are going to be able to spew out the Rauner campaign line. The irresponsibility and recklessness of the state’s actions during the past two years are going to wind up being a part of the gubernatorial legacy.

Rauner, I’m sure, will remain in “Blame Madigan!” mode for the next 16 months – but only the silliest of voters will take any of that seriously.

 

MADIGAN: Gained from S&P move

Madigan, of course, will enjoy every bit of this. Both with Standard & Poors, and the likelihood that Moody’s Investors Service will follow up with similar statements in coming days.

IT WAS MADIGAN himself who put out the word to the Statehouse Scene on Wednesday that he had achieved a sense of victory – or that Rauner rhetoric was exposed as being a little bit more phony than it previously was regarded.

“It’s clear from (Standard & Poors) statement that ratings agencies, like all Illinois residents, are hoping Governor Rauner will work in good faith with legislators to address those challenges rather than rejecting compromise by turning further to the extreme right,” the Speaker said, in a prepared statement.

Or will the Rauner types, whom I think are really just anti-Madigan rather than caring one bit about Gov. Brucie himself, continue to spew their trash talk – all desperately hoping for an Illinois version of what we have nationally.

A government meant to appeal to the same types of people as the 46 percent who actually voted for this Age of Trump. Perhaps they view a Reign of Rauner where only certain Illinoisans matter as being desirable – although I think they’ll be disappointed with the election results come Nov. 7, 2018.

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How long until our city's finances are merely regarded as equal of polluted?

We’re junk! At least the bonds issued by our city government for purposes of raising money to pay for projects have become.

For the record, Moody’s Investor’s Service said Tuesday that it was reclassifying the status of bonds from Baa2 to Ba1 with a negative outlook. That’s one grade below investment level and means that anyone buying a Chicago-issued bond is doing so on speculation.

IN THE WORLD of high finance, the slang term is “junk bonds.” As in our finances are supposedly so uncertain that we can’t be trusted to repay the debts incurred.

The only people who technically would buy such bonds are those looking for a bargain, figuring they can get them so cheap that, what the heck have they really got to lose.

But while many municipalities like to boast about how high their ratings are with the bond rating services, we in Chicago can no longer do that.

What brought this act on was the ruling last week by the Supreme Court of Illinois – the one that struck down the General Assembly’s attempt to fix the way the state funds its pension programs for retired state workers, educators and legislators.

THERE WERE A lot of people gloating at that act because they wanted to perceive it as evidence that Democrats had managed to bungle the attempt to resolve the state’s financial problems.

Now, we still have those problems, and the longer they last the greater they will linger. It’s a complete mess. But now we have to consider the reality that their politically partisan “victory” results in a business failure that will impact the whole state.

Personally, I always have been skeptical of reading too much into the actions of business-oriented agencies, because their concerns don’t always match up with those of the public at large.

Let’s not forget that when then-Gov. Pat Quinn signed into law the pension reform measure, the bond rating agencies reacted favorably because we fixed our problem.

SO BY THEIR logic, it was good for us to do something that was later found to be unconstitutional. While taking up the issue again is a bad action; one that reduces us to the level of “junk.”

Does this mean that when our political people manage to come up with another solution to this problem, we will get our bond rating upgraded again?

Will our financial status cease to be trashy and decrepit?

Or could this be financial technicalities that we all are reading way too much into? It’s hard for me to get too worked up over this – even though I realize it means our government is going to get whacked with even more interest payments when it has to take on the cost of borrowing money.

HAVE WE REALLY come down to the level of being the equivalent of the kind of person whose only financial option is to use payday loan stores whenever they have debts that just can’t be postponed any longer?

Or is this something more akin to the status of the Chicago River, which back when I was younger much was made of the fact that the water quality was considered to be toxic. Mere contact with its water was a health hazard.

Our river is still something you don’t want to drink directly or take a swim in. But it has been cleaned up in recent years to the level where it is now merely classified as “polluted.”

How long will it take our political people to bolster the city’s finances to the point where they’re no longer toxic, but merely polluted?

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